Britain's top shares closed slightly higher on Tuesday, stemming a steep four-day sell-off, but cruise operator Carnival tumbled after it reduced its earnings outlook.
The FTSE 100 index had been rattled by falling metals prices, inflation worries and a weak dollar which saw the index suffer its biggest two-day fall in 3-1/2 years by the end of trade on Monday, in a 260-point sell-off which began last Wednesday.
But analysts say the FTSE was due a correction following a sparkling run to successive five-year peaks and remain broadly confident that beyond the recent retreat lie further gains for UK equities.
The FTSE 100 closed 4.9 points higher at 5,846.2 points.
"We're advising those investing on a short-term basis to hold fire for now but we're seeing longer-term investors take advantage of the knock-backs we've seen in better quality stocks," said Killik & Co Stockbrokers analyst Graham Neale.
"We think the FTSE is in a rising trend so we're expecting a choppy summer but, nevertheless, it is a good time to be building positions if your interest is in staying in beyond the summer."
One stock helping to put the brakes on the FTSE slide was satellite broadcaster BSkyB which advanced 3.2 percent on market talk Rupert Murdoch's News Corp might increase its stake in the UK-listed company, dealers said.
Analysts were sceptical, however.
"The rationale is because it's cheap and you could leverage up the company, but with the dollar going the way it is it's not as cheap as it used to be," said Exane BNP Paribas analyst Philip Guest.
Confectioner and drinks group Cadbury Schweppes rose 3.3 percent with dealers citing resurgent bid talk while caterer Compass Group was 2.6 percent higher after it reported forecast-beating results.
Commodity stocks, among the major gainers during the market's run-up to 5-year highs, could not match the FTSE's recovery despite gold and copper prices steadying following recent losses.
Steelmaker Corus shed 4 percent, diversified miner Xstrata lost 4.9 percent and Anglo American slipped 2.9 percent.
Shares in the world's biggest cruise ship operator, Carnival, slumped 12.3 percent - its biggest one-day percentage fall since the aftermath of September 11 2001 - after cutting its outlook for 2006 earnings because of higher fuel costs and weak demand for Caribbean cruises.
Fund manager Schroders was another key feature on the downside, falling 3.1 percent despite reporting a more than 41 percent gain in quarterly profits.
"These stocks are hugely geared to stock markets and people are nervous. All we have seen are scrappy sellers and it does not take a lot to get them down as they are quite a thin trader," said one dealer.
Fellow fund manager Man Group also slipped, down 3.7 percent.
Back among gainers, dealers said defensive stocks such as AstraZeneca and British American Tobacco fared well because many investors remain cautious after the recent sell-off.
Household goods maker Reckitt Benckiser was another talking point, up 1.7 percent after investment bank Merrill Lynch flagged the stock as a "buy", citing attractive valuations and earnings.